While that argument may still hold true to some degree today, the risk dynamic in buying Facebook at its current level has drastically changed -- in particular because the uncertainty that once surrounded the IPO is now over.
Can the company ever figure out a way to effectively monetize its 900 million users, of which over 400 million are considered "active members?" I think it can because it has the law of large numbers on its side.
These bitter bears dealing with a case of sour grapes have to now realize that they need to distinguish between Facebook, the new public issue, vs. a startup company with an "if you build it they will come" model -- they are not the same. Though legitimately there are questions about the value of social media, I think it is foolish to discount the company's goldmine of demographic information -- that in and of itself is worth a considerable amount of money to companies who are in desperate need of targeted marketing to grow their businesses.
However according to some readers -- presumably from the same investor base that thought it was a great buy at $38, the argument is that the stock is now heading to $15, while some have even suggested $6. How ridiculous and absurd can an extreme be from one end to the other? Again, when coming up with these thoughtless claims, the popular reason is that there will be a new company that emerges and render Facebook irrelevant or simply, the company does not deserve its valuation by Apple and Google standards.
Well, it seems Facebook has now grown tired of that argument and has recently
launched an app center
as it seeks to not only compete with both Apple and Google head-on, but more importantly it wants to dispel notions of its inability to profit from its user base while also addressing mobile ad revenue. However, these same bears are quick to point out that these are merely "acts of desperation" -- essentially the company is destined to fail no matter what it does.